SIFCO INDUSTRIES INCSIF
SIFCO INDUSTRIES INC Income Taxes Disclosure
Income Taxes
The components of income (loss) before income tax provision are as follows:
| Years Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| U.S. | $ | (1,369) | $ | (8,309) | |||||||
| Non-U.S. | 621 | (280) | |||||||||
| Loss before income tax provision | $ | (748) | $ | (8,589) | |||||||
Income tax provision consists of the following:
| Years Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Current income tax provision (benefit): | |||||||||||
| U.S. federal | $ | — | $ | 70 | |||||||
| U.S. state and local | 9 | 1 | |||||||||
| Non-U.S. | 167 | (46) | |||||||||
| Total current tax provision | 176 | 25 | |||||||||
| Deferred income tax provision: | |||||||||||
| U.S. federal | 9 | 10 | |||||||||
| U.S. state and local | — | 2 | |||||||||
| Total deferred tax provision | 9 | 12 | |||||||||
| Income tax provision | $ | 185 | $ | 37 | |||||||
The income tax provision in the accompanying consolidated statements of operations differs from amounts determined by using the statutory rate as follows:
| Years Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Loss before income tax provision | $ | (748) | $ | (8,589) | |||||||
| Income tax provision (benefit) at U.S. federal statutory rates | (157) | (1,804) | |||||||||
| Tax effect of: | |||||||||||
| Foreign rate differential | 150 | (4) | |||||||||
| Permanent items | (2) | 59 | |||||||||
| State and local income taxes | 9 | 4 | |||||||||
| Federal tax credits | (226) | (241) | |||||||||
| Valuation allowance | 400 | 1,943 | |||||||||
| Other | 11 | 80 | |||||||||
| Income tax provision | $ | 185 | $ | 37 | |||||||
Deferred tax assets and liabilities at September 30 consist of the following:
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net U.S. operating loss carryforwards | $ | 8,369 | $ | 9,407 | |||||||
| Net non-U.S. operating loss carryforwards | 639 | 629 | |||||||||
| Employee benefits | 324 | 849 | |||||||||
| Inventory reserves | 546 | — | |||||||||
| Allowance for credit losses | 36 | 28 | |||||||||
| Intangibles | — | 296 | |||||||||
| Foreign tax credits | 1,215 | 1,724 | |||||||||
| Other tax credits | 2,227 | 2,175 | |||||||||
| Other | 2,211 | 1,908 | |||||||||
| Total deferred tax assets | $ | 15,567 | $ | 17,016 | |||||||
| Deferred tax liabilities: | |||||||||||
| Depreciation | (4,307) | (5,308) | |||||||||
| Inventory reserves | — | (573) | |||||||||
| Prepaid expenses | (517) | (338) | |||||||||
| Intangibles | (245) | — | |||||||||
| Other | (9) | (51) | |||||||||
| Total deferred tax liabilities | $ | (5,078) | $ | (6,270) | |||||||
| Net deferred tax assets | 10,489 | 10,746 | |||||||||
| Valuation allowance | (10,652) | (10,900) | |||||||||
| Net deferred tax liabilities | $ | (163) | $ | (154) | |||||||
At September 30, 2025, the Company has a non-U.S. tax loss carryforward of approximately $5,458 related to the Company’s non-operating subsidiary. The Company’s non-operating subsidiary ceased operations in 2007 and therefore, a valuation allowance has been recorded against the deferred tax asset related to the Irish tax loss carryforward because it is unlikely that such operating loss can be utilized unless the Irish subsidiary resumes operations. The non-operating and Italian tax loss carryforwards do not expire.
The Company has $1,215 of foreign tax credit carryforwards that are subject to expiration in fiscal 2026-2028, $2,215 of U.S. general business tax credits that are subject to expiration in 2035-2045, $2,248 of interest expense carryforward that do not expire, $670 of capital loss carryforward that expires in 2030, and $32,943 of U.S. Federal tax loss carryforwards with $4,643 subject to expiration in fiscal 2037 and $28,300 that do not expire. A valuation allowance has been recorded against the deferred tax assets related to the foreign tax credit carryforwards, U.S. general business credits, interest expense carryforward, and U.S. Federal tax loss carryforwards. The valuation allowance decreased during fiscal 2025 related to $116 in amounts charged to expense less $364 of reductions charged to other accounts. The valuation allowance increased during fiscal 2024 related to $2,000 in amounts charged to expense less $212 of reductions charged to other accounts.
In addition, the Company has $12 of U.S. state tax credit carryforwards subject to expiration in fiscal 2029 and $30,151 of U.S. state and local tax loss carryforwards subject to expiration in fiscal 2026-2044. The U.S. state tax credit carryforwards and U.S. state and local tax loss carryforwards have been fully offset by a valuation allowance.
The Company reported liabilities for uncertain tax positions, excluding any related interest and penalties, of $22 for both fiscal 2025 and 2024. If recognized, $22 of the fiscal 2025 uncertain tax positions would impact the effective tax rate. As of September 30, 2025, the Company had accrued interest of $19 and recognized $1 for interest and penalties in operations. The Company classifies interest and penalties on uncertain tax positions as income tax expense. A summary of activity related to the Company’s uncertain tax position is as follows:
| 2025 | 2024 | ||||||||||
| Balance at beginning of year | $ | 22 | $ | 22 | |||||||
| Decrease due to lapse of statute of limitations | — | — | |||||||||
| Balance at end of year | $ | 22 | $ | 22 | |||||||
The Company is subject to income taxes in the U.S. federal jurisdiction, Ireland, Italy and various states and local jurisdictions. The Company believes it has appropriate support for its federal income tax returns. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for fiscal years prior to 2022, state and local income tax examinations for fiscal years prior to 2019, or non-U.S. income tax examinations by tax authorities for fiscal years prior to 2009.
The Company does not record deferred taxes on the undistributed earnings of its non-U.S. subsidiaries as it does not expect the temporary differences related to those unremitted earnings to reverse in the foreseeable future. In October 2024, the Company sold 100% of the share capital of CBlade for cash consideration. No material tax resulted from the sale. The only non-U.S subsidiaries the Company has are the two Ireland non-operating entities and as of September 30, 2025, the Company’s Ireland subsidiaries had accumulated deficits of approximately $2.Free Sentinel
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 22, 2025 | Showing above |
| 2024 | Dec 26, 2024 | |
| 2023 | Jan 2, 2024 | |
| 2022 | Dec 23, 2022 | |
| 2021 | Dec 10, 2021 | |
| 2020 | Dec 23, 2020 | |
| 2019 | Dec 16, 2019 | |
| 2018 | Dec 6, 2018 | |
| 2017 | Dec 20, 2017 | |
| 2016 | Dec 6, 2016 | |
| 2015 | Jan 29, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.